United States securities and exchange commission logo
May 24, 2022
Edward Durkin
Chief Financial Officer
Casa Systems, Inc.
100 Old River Road
Andover , Massachusetts 01810
Re: Casa Systems, Inc.
Form 10-K for the
year ended December 31, 2021
Form 8-K furnished
April 18, 2022
File No. 1-38324
Dear Mr. Durkin:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K filed February 25, 2022
Consolidated Statements of Operations and Comprehensive Income (Loss),
page 76
1. We note from your
disclosure on page 59 of MD&A that the decrease in selling, general
and administrative
expense was primarily driven by a $2.5 million decrease in
depreciation expense as
assets that became fully depreciated were not replaced. Please
tell us if all
depreciation expense is included in selling, general and administrative
expense or if any
amounts are included in cost of revenue and tell us how you considered
the guidance in SAB
Topic 11:B. Please note that we believe it would be inappropriate to
present a gross profit
subtotal that excludes depreciation and amortization.
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies
Inventories, page 80
Edward Durkin
FirstName LastNameEdward Durkin
Casa Systems, Inc.
Comapany
May NameCasa Systems, Inc.
24, 2022
May 24,
Page 2 2022 Page 2
FirstName LastName
2. You disclose that inventories are stated at the lower of cost or
market value. Please clarify
if you recognize inventory at the lower of cost or market value, or
lower of cost or net
realizable value, and revise your disclosures accordingly. See ASC
330-10-35-1B.
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies
Revenue Recognition, page 83
3. Please clarify the nature of the maintenance and support services
provided to customers in
connection with your perpetual licenses. If material, tell us how you
determined that these
support services are distinct performance obligations. To better
understand your
disclosure, tell us if customers can 'opt out' of support services
included in the original
sale, for a discounted purchase price. Please also disclose the
percentage of customers
who purchase the annual renewals. Refer to ASC 606-10-25-21.
Note 16. Segment Information, page 107
4. We note from your disclosure in Note 16 that you operate as one
operating segment and
the CODM is your President and Chief Executive Officer. We also note
from an Investor
Day 2021 presentation, that management includes Vice Presidents of
Access Devices,
Product Management and Wireline Solutions. Please describe the role of
the CODM and
each of the individuals who report to the CODM. Also, please describe
the roles of the
aforementioned Vice Presidents. In addition, please provide us the
following information:
Tell us how often the CODM meets with his/her direct reports,
the financial
information the CODM reviews to prepare for those meetings, the
financial
information discussed in those meetings, and who else attends
those meetings;
Describe the information regularly provided to the CODM and how
frequently it is
prepared;
Describe the information regularly provided to the Board of
Directors and how
frequently it is prepared;
Explain how budgets are prepared, who approves the budget at
each step of the
process, the level of detail discussed at each step, and the
level at which the CODM
makes changes to the budget;
Describe the level of detail communicated to the CODM when
actual results differ
from budgets and who is involved in meetings with the CODM to
discuss budget-to-
actual variances; and
Describe the basis for determining the compensation for each of
the individuals that
report to the CODM.
Edward Durkin
Casa Systems, Inc.
May 24, 2022
Page 3
Form 8-K furnished April 18, 2022
Exhibit 99.1 Earnings Release
Reconciliation of Selected GAAP and Non-GAAP Financial Measures, page 7
5. We note that your reconciliation of net income to non-GAAP net income
includes an
adjustment for amortization of acquired intangibles. Please revise to
disclose the nature of
the amortization that is being excluded from the measure; and that
while the expense is
excluded, the revenue of the acquired company is reflected in the
measure and that those
assets contribute to revenue generation.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Charles Eastman at 202-551-3794 or Claire Erlanger at
202-551-
3301 with any questions.
FirstName LastNameEdward Durkin Sincerely,
Comapany NameCasa Systems, Inc.
Division of
Corporation Finance
May 24, 2022 Page 3 Office of
Manufacturing
FirstName LastName